AviaBid.

com - The Internet's On-line Aviation Auction Community and Business-to-Business Marketplace

Business Plan
Marco Santiago JR, President, CEO th 14432 South 40 Street Phoenix, Arizona 85283 Tel. (602) 300-6059 Fax. (425) 977-7774 msantiago@aviabid.com March, 2000

This copy of the AviaBid.com Business Plan is being issued to you for your personal review. By accepting this copy, you are acknowledging your understanding, agreement, and consent of the following: This confidential document is the sole property of AviaBid.com, LLC. All information contained within this business plan and its appendices belong to AviaBid.com, LLC. No part hereof may be reproduced, distributed or used for any other purposes without the express written consent of AviaBid.com, LLC. This copy must be immediately returned to AviaBid.com, LLC upon request.

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Table of Contents
1.0 EXECUTIVE SUMMARY .........................................................................................................................................................1 1.1 VENTURE AND MISSION ...............................................................................................................................................................1 1.2 KEY INVESTMENT CONSIDERATIONS ............................................................................................................................................1 1.3 MARKET AND OPPORTUNITY ........................................................................................................................................................2 1.4 PRODUCT AND ADVANTAGES .......................................................................................................................................................3 1.5 MANAGEMENT .............................................................................................................................................................................3 1.6 FINANCIAL PROJECTIONS .............................................................................................................................................................4 1.7 CAPITAL REQUIRED .....................................................................................................................................................................4 2.0 COMPANY SUMMARY AND KEYS TO SUCCESS ..............................................................................................................5 2.1 COMPANY OWNERSHIP.................................................................................................................................................................5 2.2 COMPANY LOCATIONS AND FACILITIES ........................................................................................................................................5 2.3 SHORT TEM OBJECTIVES ..............................................................................................................................................................5 2.4 KEYS TO SUCCESS........................................................................................................................................................................5 3.0 PRODUCTS ..................................................................................................................................................................................6 3.1 PRODUCT DESCRIPTION ...............................................................................................................................................................7 3.2 FUTURE PRODUCTS ......................................................................................................................................................................9 3.3 COMPETITIVE COMPARISON .........................................................................................................................................................9 3.4 TECHNOLOGY ............................................................................................................................................................................10 4.0 MARKET ANAYSIS SUMMARY............................................................................................................................................11 4.1 MARKET SEGMENTATION ...........................................................................................................................................................11 4.2 MARKET SEGMENTATION NEEDS................................................................................................................................................11 4.3 MARKET TRENDS .......................................................................................................................................................................12 4.4 INTERNET MARKET GROWTH - BUSINESS-TO-BUSINESS..............................................................................................................13 4.5 AVIATION AND AEROSPACE INDUSTRY ANALYSIS .......................................................................................................................14 4.6 INDUSTRY PARTICIPANTS ON THE INTERNET ...............................................................................................................................18 4.7 COMPETITIVE ANALYSIS ............................................................................................................................................................19 4.8 OPPORTUNITIES .........................................................................................................................................................................22 4.9 THREATS AND RISKS ..................................................................................................................................................................24 5.0 MARKETING STRATEGY AND IMPLEMENTATION SUMMARY ...............................................................................24 5.1 COMPETITIVE ADVANTAGES.......................................................................................................................................................24 5.2 COMPETITIVE WEAKNESS...........................................................................................................................................................25 5.3 KEY STRATEGIES .......................................................................................................................................................................25 5.4 VALUE PROPOSITION .................................................................................................................................................................28 5.5 POSITIONING STATEMENT ..........................................................................................................................................................28 5.6 PROMOTION ...............................................................................................................................................................................28 5.7 PRICING .....................................................................................................................................................................................29 5.8 SALES AND MARKETING PROGRAMS...........................................................................................................................................30 5.9 SALES FORECAST .......................................................................................................................................................................31 5.10 MILESTONES ............................................................................................................................................................................33 6.0 MANAGEMENT AND ORGANIZATIONAL SUMMARY ..................................................................................................34 6.1 MANAGEMENT TEAM .................................................................................................................................................................34 6.2 ADVISORY BOARD .....................................................................................................................................................................36 6.3 MANAGEMENT TEAM GAPS ........................................................................................................................................................36 6.4 ORGANIZATIONAL STRUCTURE ...................................................................................................................................................38 6.5 PERSONNEL PLANS.....................................................................................................................................................................38 7.0 FINANCIAL PLANS..................................................................................................................................................................39 7.1 ASSUMPTIONS ............................................................................................................................................................................39 7.2 PROJECTED INCOME STATEMENT (000S OMITTED) ......................................................................................................................41 7.3 PROJECTED BALANCE SHEET (000S OMITTED) ............................................................................................................................42 7.4 PROJECTED STATEMENT OF CASH FLOWS (000S OMITTED) .........................................................................................................43 7.5 PROJECTED BUSINESS RATIOS (000S OMITTED) ..........................................................................................................................44 7.6 PROJECTED LONG TERM PLAN (000S OMITTED)..........................................................................................................................44 7.7 PROJECTED BREAK EVEN ANALYSIS (000S OMITTED) .................................................................................................................45 APPENDIX A....................................................................................................................................................................................46

AviaBid.com - The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace

1.0 Executive Summary
1.1 Venture and Mission
AviaBid.com aims to establish itself as a leading online destination for aviation and aerospace business-to-business (B2B). Currently, AviaBid.com operates and provides an aviation auction community environment for aviation enthusiasts, professionals, and business-to-business users on the web. AviaBid.com’s 300+ members are able to auction and bid on items, post to community forums, and browse and/or search through a broad range of aviation related links to other aviation-related websites. We believe there is a significant opportunity to quickly establish ourselves as a major presence in the exchange market space. Significant and incremental returns can be achieved by capitalizing on the growth of this market by developing an effective, efficient, and value added service for buyers and sellers. Our mission is to expand on our current business model in order to establish a vertically focused on-line business-to-business exchange for professional purchasing and selling organizations in the aviation and aerospace community. This community may include original equipment manufacturers (OEM’s), parts and service resellers, fixed based operators (FBO’s), service providers, and aviation/aerospace consulting. This network of buyers and sellers will help facilitate effective and efficient communication, reduce purchasing and selling cycle-times, and open markets for all members of the community. Above all, AviaBid.com aims to add value to the buying and selling function for each of its members and to contribute to the their success in business.

1.2 Key Investment Considerations
We believe our plan identifies and addresses a significant business opportunity based on the following: • • • • • •
The Aerospace industry is huge. This industry currently generates about $500 billion in worldwide sales annually. The B2B market is experiencing rapid growth. Revenues from Aerospace & Defense B2B transactions are projected to grow

from $547 million in 2000 to $14.5 billion in 2004. AviaBid.com has the potential to create great value through savings, and the addition of value-added services, in an industry worth more than $50 billion in aftermarket volume alone. The market is highly fragmented and is ready to take advantage of a vertically focussed online marketplace. The current marketplace contains thousands of small and medium size suppliers and buyers that will find value in a vertically focused online trading community such as AviaBid.com. A market leadership position remains attainable. We plan to provide a level of service that is not currently provided in this industry space. First to market is still attainable with several companies still talking about entering this space. Management team brings experience. The entire team has senior level experience in supply chain management, branded marketing, and information technology. We bring a thorough understanding of how to manage the major elements of a successful online business-to-business exchange and marketplace. Opportunities for creating value along the supply chain. Relatively new and exciting technologies are now available that will allow market makers, such as ourselves, to create value along the entire supply chain. Capitalizing on our experience in supply chain management, and our ability to move quickly in order to implement technology, we are in a good position to execute a plan that will bring a branded level of service to small and medium sized suppliers and buyers looking for economies of scale within their respective organizations. We offer several exit strategies. We are prepared to focus our efforts on establishing a brand that closely links high quality and reliable e-commerce, business-to-business integration, and the aviation/aerospace industry. Establishing and extending the AviaBid.com brand in this manner will help us establish strong valuations with an eye toward returning very impressive multiples on the investor’s initial investment. Such returns may take the form of an acquisition, strong positive cash flows, and/or an initial public offering.

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AviaBid.com - The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace

1.3 Market and Opportunity
We target two markets within the aviation community – the aviation consumer and the industrial buyer and seller. The commercial, or Business-to-Business segment of the market is by far the larger of the two markets in terms of potential revenue. This segment is looking for an effective and efficient medium to locate and/or sell products through the use of a vertically focused online community. The conventional model for the trade of idle assets is inefficient. Traditionally, those looking to sell idle assets use a protracted process of contacting potential buyers via phone or fax. Sellers can spend months looking for a buyer, let alone several who bid competitively. Likewise, buyers are confronted with a selection limited by a diffused pool of sellers and often find that their searches and auctions are time-consuming and fruitless. AviaBid.com's concept is to offer a faster, easier, and more efficient way to buy and sell aviation related business surplus by becoming the central marketplace for companies who are looking to buy or sell their excess inventory. The e-commerce model expands the pool of buyers and intensifies competition. Buyers bid against each other in real-time, as if in a live auction, and the centralized marketplace enables those buyers to choose from an extensive worldwide selection. Sellers will also have the opportunity to compete on quotes requested by purchasing professionals and other buyers through a reverse auction format. In all, the buying and selling cycle is considerably shortened. The consumer market will represent a smaller percentage of our revenue base, but will represent a much larger portion of our membership community. It is more focused on buying and selling relatively low priced items that meet the needs of the general aviation community. The general aviation community also tends to exist in a more social context relative to the commercial aviation business-to-business community. As such, AviaBid.com plans on providing an environment that promotes a relatively social communication structure supported by special interest bulletin boards and value added and pre-qualified vendor offerings to enhance the member’s online experience. The opportunity to engage the aviation and aerospace industry with an online business-to-business presence is quite substantial. More and more businesses in this industry are beginning to recognize the potential for cost savings by virtue of participating in an online exchange environment, which we aim to host. With respect to the aviation and aerospace market, Forrester Research predicts that transactions, which are transacted through online business-to-business exchanges, are expected to grow substantially from $547 million in year 2000 to $14.5 Billion by the year 2004.

B2B Aerospace & Defense Revenue Growth
$16 $14 $12 $10
Billions

$14.5 $11.5

$8 $6 $4 $2 $0 2000 2001 $0.5 $1.5

$6.1

2002

2003

2004

Competition in this market is relatively thin. There are currently very few players, however, competition in this space is also beginning to intensify, and the window of opportunity will continue to close for those that move too slowly into this space. Establishing a foothold with the intent to dominate will assure our success; however, we do see a period of consolidation in the 12 to 18 month horizon. After the consolidation period, the market will only support a handful of players. The rest will very likely be acquired or left to support unsustainable niches.

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Sellers have the advantage of listing their goods and services at any time. Negotiating and managing several strategic partnerships were also an important aspect of his responsibilities. 3 . Buyers and sellers do not have to plan for and/or wait for specific auction dates. Our goal is to provide an environment that will allow our community members the ability to conduct online negotiations. and provide for store front and/or catalog management and search functions. Avnet’s IMS group is a world-class supplier of supply-chain logistics and utilizes EDI and the Internet for supply-chain integration.com on August 3rd 1999. He currently negotiates these strategic partnerships by helping customers understand their total cost of ownership.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 1. David is currently the head of marketing and finance for Avnet Inc.com’s reverse auction will bring real business opportunities to suppliers by paving the way into accounts that had previously been unattainable or closed because of traditional sales and purchasing channels.. 7days a week. and effective. 1. Vice President Marketing David McIntyre has over eight years of management experience in the Internet and technology industry. establish their own virtual procurement system. AviaBid. Buyers have the advantage of visiting a destination that is not out of the way. from anywhere. David has been extensively trained in executive level MBA classes from The Anderson School at UCLA and holds a BS in Electrical Engineering from Kansas State University.com auctions can be accessed from the convenience of home or office.4 Product and Advantages We aim to leveraging the power of e-commerce by connecting industrial aviation and aerospace purchasing and selling organizations.AviaBid. David McIntyre. David leads his organization by developing best in class supply chain integration for tier one customers including electronic forecasts. He is currently responsible for all strategic and promotional marketing. services.’s $2 billion Integrated Material Services (IMS) group. Marco is a senior consultant in the Customer Relationship Management (CRM) group at the Oracle Corporation. AviaBid. and to a much broader audience of buyers – this expands the seller’s distribution of goods by several orders of magnitude. The application of our reverse auction model for business-to-business transactions will have profound implications for markets. promotion. and payment. Members will also be provided free coverage of business and consumer oriented news and product information. Currently. Purchasing programs will realize huge savings from industry suppliers that have a greater opportunity to bid on purchasing requests in a vertically focused industrial community.com members will also find value in the amount of information provided during their visit to the site. manage processes and workflow. AviaBid. David worked within Intel’s Aerospace & Military division where he was instrumental in the creation and implementation of business and marketing plans. check on outstanding transactions.5 Management Marco Santiago Jr. including production of Avnet’s Global Supply Chain magazine. He worked with several electronic original equipment manufacturers and was responsible for all aspects of bringing new products to market including pricing. Marco studied in the Technology Management MBA program at the University of Phoenix. Marco is a licensed pilot and a former USAF Reserve and Arizona Air National Guard crew chief on C-5 and C-141 aircraft. He is a graduate of Western International University. Before attending Western International University. and distribution. He was employed as a programmer analyst for the Adaptive Broadband Corporation from August 1996 to February of 2000. where he majored in aerospace engineering and applied mathematics. Members will find a wealth of aviation related content provided by members as well as our site content editors. invoicing. Auctions are held 24 hours a day. President. CEO Marco Santiago Jr. Marco attended Arizona State University. David is the developer of the current Performa system utilized by Avnet’s global sales force and continues to lead his organization in strengthening profitability goals by implementing an activity based costing system.com . where he studied information systems and business administration. triggering. product development. Our traditional auction model promises to make buying and selling aviation goods. Prior to joining Avnet.com as a venture. launched AviaBid. convenient. Before devoting himself full time to the development of AviaBid. and 365 days a year. and capital equipment more efficient.

the company plans to turn cash flow positive by the end of the first operating year depending on the degree with which we aggressively market ourselves.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace Kim B.500 $58 $116 TAM 1% Fee 40% 2% Fee 40% 1. and $78 million. and is projected to be $46 million. engineering and consulting. implementing. Revenue for the years 2002 through 2004 is currently based on an organic growth model. He holds a Master of Science in Engineering Management from the University of South Florida and a Bachelors degree in Electrical Engineering from the Florida Institute of Technology. We have developed financial projections for the period of April 2000 through April 2004. sales.AviaBid. $58 million. and administrative personnel.1 million.com . technical marketing. These goods and services may include office supplies and equipment. and other goods and services that potential members of our community may find convenient to buy and sell without having to go to other online markets. 1998 imports of aviation goods and services reached almost $22 billion while exports soared to almost $59 billion (General Aviation Manufacturers Association (GAMA). With respect to the aviation and aerospace industry. and marketing management positions with Intel.500 $46 $92 2004 $14. with two follow on rounds of $700 thousand in four month intervals for a total investment of $2. We believe that the market is bigger if we include ancillary and complimentary goods and services that do not fall directly under the canopy of aviation and aerospace goods and services. implementing an aggressive marketing strategy. marketing and operations with Fortune 500 companies and an emerging technology company.4 million. For the past 4 years he has held product marketing. Values are in millions of dollars.500 $6 $12 2002 $6. the aviation and aerospace industry will continue to grow. Forrester Research estimates that total transaction revenue is expected to top $14. while revenue for 2001 is projected to be $24. Bozik.1 million based upon a starting date in April. Barring additional investment or acquisitions. Revenue Projections ($Millions) 2000 $500 $2 $4 2001 $1.7 Capital Required AviaBid. Through these assignments he has successfully brought semiconductor and liquid crystal display technologies to the marketplace. A more detailed analysis may be found in the financial section of the plan. Kim is a senior strategic demand analyst for Intel and is responsible for determining market trends and it’s effect on factory production and capital purchase needs. Vice President Operations and Community Logistics Kim Bozik has over 12 years experience in product development. improving. He was a senior systems engineer with Honeywell for 8 years and was a key member of inertial navigation equipment development for the space industry. 1. Currently.100 $24 $49 2003 $11. information systems equipment and services.6 Financial Projections Aviation related imports and exports have been on the rise since 1995. This trend is expected to continue well into the 21st century. Organic growth is derived from forecasted industry growth rates. This includes. and Three-Five Systems. 4 . The projections shown are based on us capturing 40% of the total business-to-business market and extracting a 1% or 2% on every transaction in the trading community. but is not limited to. We have supplied a brief financial projection table based on the following assumptions. and hiring much needed technology. and extending its internet and business applications.5 billion for the online business-to-business space. Revenue for the year 2000 is projected to be $3.com's projected financial results are based on receiving approximately $795 thousand of initial start-up capital financing. respectively. This projected capital financing is in order to allow its managers to devote full time resources for the implementation and execution of its business plan over the next 6 to 12 months. Motorola. Kim's background also includes knowledge of the general aviation industry through a previous family flight instruction business. and represents a robust aviation economy in which to exploit the e-commerce initiative. By almost every measure.

To complete and extend the implementation of our business-to-business model within 60 days of capitalization.4 Keys to Success 1. The end result is the generation of 2. and partner with 5000 aviation and aerospace related suppliers of commercial and consumer parts and services by the 3rd fiscal quarter after initial implementation.1 Company Ownership AviaBid. Before then. 5. To register 10. which will attract more buyers. and Diana Eckenburg. and high quality auction listings and services. a local aviation portal for the Arizona flying community. strengthen. To register 5000 organizational buyers within the 3rd fiscal quarter of initial implementation. but are not limited to.0 Company Summary and Keys to Success AviaBid. In January of 1999 ArizonaSkyNet. 5 . and it is currently owned and operated by its principal investors. ArizonaSkyNet.3 Short Tem Objectives 1. 2. and maintain the AviaBid. the use of print advertising in nationally branded and industry related publications. best of breed technology providers that bring high degrees of core competencies in order to reduce product development cycles times and increase speed to market.attract and recruit the best expert knowledge in this industry. 1999. search engine listings. and partner with.AviaBid. of Jacksonville. Marco Santiago Jr. cross-linking with well established websites. FL. 3. 1999. targeted banner advertising. and the formation of partnerships with key industry players. Focus on our industry vertical . 2.com became a limited liability company in the state of Arizona on August 3.000 individual business-to-business users by the end of the first fiscal year. AviaBid.com Inc. Arizona. and value added offerings and services through strategic partnerships. AviaBid. value added content. Establish. To identify. Currently.com . pre-qualify. 4. 2. This will attract key sellers.com added the Internet’s first online aviation auction application.com. These strategies include. direct marketing. which ran in beta mode until August of that year. Encourage repeat traffic by maintaining a high level of community trust.com was established in September of 1998. Execute with the intent on leading our industry .This means that we will attract key buyers. Leverage community membership to attract high quality sponsors. Leverage the use of. 6. which will attract more sellers. advertisers.com was formally known as ArizonaSkyNet. 1999. aggressive and consistent participation in key trade shows.com is currently being run from the private residence of its principal operators in Tempe.com went online as a separate business entity on September 6th. 1999. 2. It began operations on September 6th. 2.com became a limited liability company in the state of Arizona on August 3. 3. 4. the website is hosted and serviced by AuctionShare.com brand with aggressive marketing strategies. and it is currently owned and operated by its principal investors.2 Company Locations and Facilities AviaBid. These objectives will serve as an initial measuring stick of our success.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 2.

is by establishing a user advisory board that will provide a forum for key players in the industry to have adequate input on policy without them having to have a controlling ownership or control on the principals or the board of directors. These partnerships will be formed with a eye toward not letting any one of them establish control of the market.0 Products Currently. 8. AviaBid. and to insure commercial neutrality. 6 . We will maintain commercial neutrality as market makers.we must benefit all players in the industry that we serve. By providing a robust platform. AviaBid. policies. we aim to ensure that buyers and sellers are optimally matched so that the buying and selling cycle is shortened. as well as actually acting as a neutral body . but not limited to. These partners may include. deeppocket investors. Operate as a virtual business . In all. and remain flexible.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace liquidity in the form of transactions within the exchange community. industry buyers and sellers.we will outsource as much of our operations as possible. One way of establishing a high level of integrity. This will have the effect of keeping staffing levels low. and practices will be structured to provide buyers and sellers of all types an unbiased and fair environment in which to conduct day-today business. This means that the exchange must be perceived as a neutral third party by all other parties. industry job search and job ads. increase our ability to move quickly in response to changing market conditions. Partner with the right players in order to scale quickly. infomediaries.com will form a vertical network of buyers and sellers in order to serve all members of the aviation and aerospace community. and trading system software providers. The virtuous circle continues and simply feeds on itself. 11. workflow processes and management. AviaBid. bulletin boards. 3. and messaging applications. 10. IT vendors. Users are allowed to post to community forums and browse and/or search through a broad range of aviation related links to other websites.com’s organization. 9. Such mechanisms will support the use of dynamic pricing models. industry rolodexes.com provides the auction functionality required for members to place aviation-related goods and services for auction on the web. and organizations participating in this community get the best returns for the time and money invested in their purchasing and selling organizations.com . content providers. and classified advertising. discussion forums.AviaBid. existing broker intermediaries. Encourage the building of community through the use of real time exchange information. AviaBid. industry newsletters. news feeds. 7. Ensure the highest level of fairness and Integrity. calendar of industry events.com will also provide a business-to-business environment through the use of market making mechanisms.

Automatic profanity filter allows filtering of unwanted words or phrases from both titles. AviaBid. similar to a traditional school grade (A. Track bids and display them during the auction and after it closes. which will generate premium revenues while options like icons.1 Product Description Business-to-Consumer and Person-to-Person Auctions AviaBid. Users listing items can select from a large array of listing options.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 3.com currently provides its members the following features and services in its auction community: • • • • • • • • • Users may choose to be notified daily by e-mail of new and/or current auctions in their categories of interest. A letter grade scale. including single item auctions and "Dutch" auctions. and much more! Reserve price auctions are available. This allows users to browse listings on their own time.com utilizes usernames and an internal e-mail system to prevent unauthorized persons from "harvesting" e-mail addresses from the auction site. This feature will allow members to contribute content to the website. An advanced feedback system allows users to leave detailed feedback on other users. An easy to use "Re-list Auction" feature makes it simple for users to start the same auction again. is outbid. This provides a more accurate assessment of the transaction than a simple "positive" or "negative" rating system. News and information related to aviation through specialized news services linked to the website • • • • • • • • • • • • • 7 .e. This allows users to set a minimum price they are willing to accept for an item. This greatly reduces the possibility that users will be targeted by unsolicited e-mail campaigns (SPAM). descriptions and feedback comments.D. or frequency of active listings.com . Community environment supported by message boards.AviaBid. winning bidder(s) and seller). The item does not sell unless bidding reaches this price. current bid.Users have dozen of different ways in which to search the auction database. or F). size. Users are allowed to search a comprehensive database of aviation related websites. feedback can only be entered by users actually involved in the transaction (i. Secure Payment Area to either set up an account or make a payment. Proxy Bidding allows users to place a maximum bid for an item. Users can access their "Personal Page" from just about anywhere on the site.com reviews the link submitted in order to maintain the quality of the links. Users have full control over their item listings. This allows users to view current stats. Additionally. All details of an auction can be viewed including starting time. Various auction types are available. and maintain friendly and professional relationships among community members. Automatic Proxy Bidding on all auctions. account information and much more. auctions they are currently bidders in. AviaBid. Daily status E-mails sent to all users with current bids and/or auctions. quantity. therefore preventing potential system abuse. is used to rate users.com operates using the latest in SSL technology for secure transmissions. AviaBid. reserve price. places a bid. A comprehensive Search System . auction length and many other optional listing features. number of bids. No limit on the number. They can set starting bid. The reserve price is not disclosed to bidders. bid history. ending time. Users are also allowed to add to this database. and in various selectable display formats. Showcase and Featured auctions. strengthen. Users can enhance their listing descriptions by adding pictures and HTML. lists an item.B. such as auctions they have listed. and will serve to help create. Send e-mail to users automatically anytime a user registers.C. or an auction in which they participated ends. colored and bold listing titles enhance the users auction. The system will place bids on their behalf as necessary until they are the high bidder or that maximum bid is reached. This feature is important to community development.

shipping. Email Fax Voice over IP Streaming Media Quote and Bid Processing Dynamic Pricing Forward and Reverse Auctions Fixed Pricing Relationships Multi-Language Translation Suppliers Buyers Thin Client Interface Requisitions > Orders > Tracking > Shipping > Billing/Invoicing > Payment Thin Client Interface Workflow Management Content Tools Catalog Search DHTML XML DHTML XML Catalog Creation and Management Online Product Configuration Integrated ERP Application Environment Oracle 11i Relational Database Management System Oracle 8i Business-to-Business Market Making Architecture AviaBid. saving millions of dollars for community participants. and the cost of ownership for a community 8 .com will provide the environment to help community members manage the selling and procurement functions through the use of exchange technologies that enable organizations to optimize workflow processes such as requisitioning.AviaBid. all users of this online market will need nothing more than a standard Internet browser. In all. billing. Voice over IP. Critical to the usefulness of the online market is our ability to provide a robust messaging system that will support Fax. the ability to provide quote and bid processing function. This platform will enable community members to better manage and maximize their buying and selling processes. Our plan is to implement a multi-layered architecture that supports a comprehensive commerce platform. and streaming media in order to maximize and provide a flexible communications system which can accompany requisitions and help facilitate the approval and workflow process. If community members wish to sell items from comprehensive catalog listings. while at the same time expanding markets for organizations selling products and services to the aviation and aerospace industry. email. and payment. order tracking. At the same time we aim to provide our members the ability of report and perform analysis on these functions. and the ability to build and sustain relationships that support fixed pricing models. Central to the growth of this on-line market is our ability to provide a model that promotes dynamic pricing strategies such as reverse auctions. while at the same time provide the search functionality needed to make them easy for customers to use. then we will provide a suite of tools needed for these members to manage such content.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace Business-to-Business Our business-to-business product offering will include a comprehensive suite of functionality which add value to professional purchasing organizations. What’s more. our market-making community will enhance and shorten the buying and selling cycle. There will be no need to install expensive proprietary software.com . ordering.

3. and there are few that have deployed the reverse auction functionality that lend itself to business-to-business buying and selling.AviaBid. who will be allowed to opt-out of such an arrangement. Other Products Common to Both Online Environments • • • • Provide its members the ability to receive targeted promotions from qualified venders. AviaBid.com's membership community of buyers and seller.com.com will position itself as a trustworthy and reliable destination.com. Avi-x.com is to make use of the increasing capabilities that broadband technology offers in order to facilitate live auction events from the physical space. Member suppliers wishing to sell to specifically qualified buyers and resellers may start such an auction. Provide original content that is specific to the aviation consumer and professional. AviaBid. This service will be at the discretion of the community member. however. AviaBid. Our ability to use the latest technology in order to more tightly integrate small to medium size companies along the supply chain will also help to differentiate us from the competition. Supply chain integration is considered to be the “killer application” for the business-to-business space.2 Future Products One of the more exciting plans for AviaBid.com. but these sites do not employ the use of reverse auction functionalities needed to dynamically set prices for parts and/or services required by purchasing agents and organizations.com will leverage its membership to promote the logistical advantage it can provide its membership by virtue of the number of 9 .com enjoys the first mover advantage within its competitive space with respect to the auction. as well as providing its users with the ability to upload inventory are PartsBase. One of the biggest differentiators is our ability to act in a consulting capacity for perspective members of the exchange community.com.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace member will be negligible. since all that will be required in order to participate in this community is a standard industry browser.3 Competitive Comparison Currently.com will partner with land based auction houses in order to bring to its members an added channel in which to participate through the use of multi-media technologies and applications.com. FindParts.com. primarily through its dynamic pricing functions embodied in our traditional and reverse auctions. AviaBid. Currently there are many aviation-related websites. 3. and ideas. AviaBid. and provide coupons for access to these shows. and AirPartsLocator.com .com. By providing the aviation community with a highly interactive forum to exchange goods. none of them offer an auction-oriented experience. Provide for a yearly conference and show planner. while providing the physical partner with the opportunity to tap into AviaBid.com plans to differentiate itself as the destination to buy and sell all things aviation. but we are in the process of positioning and focusing ourselves to become a vertically focused business-to-business destination as well. The competition has also failed to market themselves as a general destination for the aviation buyer and seller. wsdn. Spec2000. AviaBid. services.com. information. This content will serve to entertain and inform members and visitors of the market community. As high bandwidth infrastructures make themselves more readily available. AviaBid. Provide for a means of participating in closed auctions that are by invitation only.com. AviaBid. ipls.com is focused on the aviation consumer at this point. There are sites that do offer parts search and request for quote capability.com will take advantage of this opportunity in order to secure the market and raise barriers to entry as quickly as possible. which will be provided by industry partners. there are no online market makers in existence that integrate the supply chain between buyers and sellers. Doing so will strengthen and extend the brand equity of AviaBid. apls. There are no other online aviation auction communities in existence today that serve the aviation consumer market.com will position itself to provide this service to its members.com. Our expertise in supply chain management will allow us to better serve our members. AVSupport. What’s more. Websites that are currently offering parts search and RFQ capability.

This move will serve to scale our operations for anticipated growth. Our business functions will be tightly integrated with the exchange technology and supported by Oracle's 11i applications. which will allow us to get to market quickly. 3.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace members within the community and through the involvement of industry partnerships.com. AviaBid. AviaBid. This will allow AviaBid.com is currently evaluating exchange. Our philosophy is to outsource as much of the core technology functions as possible in order to reduce cost of ownership.AviaBid. We will partner with our technology providers in order to close the product development loop as tightly as possible.com does not produce new technologies. Ariba. content management. will be supported by their 8i relational database management system. we will reduce the technical risks associated with the implementation of business information systems. AviaBid.com . AviaBid. reduced our initial cost of ownership and served to speed our time to market in order to capture the first mover advantage. For now.4 Technology At this moment. 10 . which connects to a SQL server database and runs on Windows NT Servers.com's forward auction application is currently hosted on the technology provider's server at AuctionShare. Use of an Application service provider. Moai Technologies. We plan on working with leading systems integrators and application service providers in order to shorten the product development cycle. By partnering. and making use of Oracle’s technology.com relies on enabling technologies packaged by specialized technology providers in order to provide the auction function. which include Oracle. and react more quickly to market changes. which in turn. AviaBid.com to better establish itself as the business-to-business destination within its aviation oriented vertical industry. i2. and Vignette.com is an Active Server Page application. such as AuctionShare. and supply chain technologies from several industry leaders. time to market.

It is also one of our nation’s most important and dynamic industries. (General Aviation Manufactures Association) Professional and Commercial Buyers and Sellers – Global Business-to-Business Although this segment of the potential market will most likely represent a much smaller segment of the registered user base. flying over 27 million hours (nearly two times the airline flight hours) and carrying 145 million passengers annually. Although the market. Strictly speaking.. The commercial. software. This segment is made up of suppliers of parts and services in the areas of manufacturing. especially the business-to-business community. those looking to sell idle assets use a protracted process of contacting potential buyers via phone or fax. aircraft and equipment leasing. finance. and collectors of aviation memorabilia and historical artifacts. catering and in-flight services.2 Market Segmentation Needs We target two markets within the aviation community – the aviation consumer and the industrial buyer and seller. Traditionally. or global business-to-business segment of the market. Approximately 70 percent of the hours flown by general aviation are for business and commercial purposes. they have recently done so with great enthusiasm because of the efficiencies that it promises. and all indications point to continued growth for this industry well into the next decade. Sellers can spend months looking for a buyer.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 4. the competition in this space is very thin. The target business-to-business customer is a global user.e. At the moment. has been slow to embrace the advantages of e-commerce. and represents a significant opportunity in which to exploit the e-commerce initiative. and represents a significant opportunity for us. insurance. There are no dominant players. students and instructor pilots.AviaBid. the market that is defined below. The general aviation community tends to be more social in nature relative to the business-to-business community. The combined market is quite substantial.the consumer aviation community. The global business-to-business and business-to-consumer market will be quite substantial. The consumer market represents one that is focused on buying and selling relatively low priced items that meet the needs of the general aviation community. General aviation is relied on exclusively by more than 5. it must be said that the general aviation market. materials. As such.com . aviation training. the conventional model for the trade of idle assets is inefficient. we are talking about the non-professional buyer and seller.0 Market Analysis Summary We target two broad markets . and space systems hardware and services. is quite substantial.400 communities for their air transport needs (scheduled airlines served about 600). and is one that is looking for more efficient ways of conducting business.1 Market Segmentation General Aviation Consumer (person to person) By far. and the business-to-business community. the more numerous of our registration base will be the general aviation consumer. let 11 . is generally fragmented. recreational and sport pilots. General aviation is defined as all aviation other than commercial and military aviation. This group is generally comprised of general aviation aircraft owners. i. Members of this vast market are looking for an effective and efficient medium to locate and/or sell products and services through the use of a vertically focused online community. we plan on providing an environment that promotes a relatively social communication structure supported by special interest bulletin boards and value added and pre-qualified vendor offerings to enhance the member’s online experience. and the market is in its infancy. In the case of those trying to sell excess inventory of goods and services. Both market segments have shown strong growth over this past decade. it will represent a much larger portion of the revenue generating membership. However. 4. 4.

Regardless of the type.AviaBid.com's concept is to offer a central marketplace where aviation businesses can efficiently buy and sell goods and services (excess or otherwise). with categories ranging from antiques to commercial and capital equipment. These two sites display a robust list of online auction sites. there are well over 400 online auction sites. In the United States alone. AviaBid. as if in a live auction. AircraftDealers. In all. Over the past year there has been a growing population of aviation related E-commerce websites. present a huge opportunity for entrants of aviation related electronic commerce.com. however. only recently. buyers bid against each other in real-time. PilotToys. Such an environment will serve to expand markets to many suppliers while shrinking the procurement cycle for buyers. just to name a few – there are hundreds of them in existence. or search for industry related products. Although the person-to-person auctions have firmly established themselves as destinations for the consumer oriented market. and AeroMall. In 1998. news.9 Billion up from $4. One has to only look to the two main online auction aggregators – AuctionWatch. and the centralized marketplace enables those buyers to choose from an extensive worldwide selection. 12 . and often find that their searches or auctions are time-consuming and fruitless. 4. has the online auction model turned to serve the needs of the business-to-business community. Some of the more popular ones are JetPlane. there are very few players in this business-to-business arena. Buyers looking for a good deal and sellers looking to open markets also face a diffused pool of prospects. Reverse auctions. when combined with the explosive and increasing relevance of E-commerce as a way of doing business. Some of them are pure Internet entities.7 Billion in 1997 (General Aviation Manufacturers Association 1999 Annual Industry Review and Outlook Briefing). and commercial or business-tobusiness auction sites. build an online storefront. the buying and selling cycle is considerably shortened. which increases the buying and selling cycle time and adds to inefficiencies associated with the process. buyers are confronted with a selection limited by a diffused pool of sellers.com.com to get a sense of how popular online auctioning has become. Online auctioning is expected to play a major role in how businesses turn idle and excess inventories of capital equipment. the general aviation industry recorded its highest industry billings in history – $5. Currently. Likewise.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace alone several who bid competitively. The e-commerce model expands the pool of buyers and intensifies competition. their numbers are increasing.03 billion (Aerospace Industries Association of America – 1998 Year end Review).net.3 Market Trends Online Auctioning Online auctions have become more popular than ever this past year. Aviation and E-commerce The aerospace industry currently generates about $500 billion in worldwide sales annually. Sellers will have the opportunity to compete on quotes that are requested by purchasing organizations and other buyers through a reverse auction format. and information.com and InternetAuctionList. aerospace industry sales reached $145. for example. Currently.com . ListaPlane. with a growing list of new ones being added every month. Online auction sites may be divided into two main categories – person-to-person. In the United States the aviation and aerospace industry is experiencing one of the healthiest periods of growth in recent times.com. These figures. Many of these sites are little more than electronic storefronts for land based aviation supply stores. have the capability of opening markets for suppliers of parts and services and facilitate the procurement of maintenance repair and operations and other services. In the case of our auctions.com. participate in online forums and discussions.

com . of Benchmark Capital.S.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 4. U. those that serve the growing aviation community..5 billion (ActiveMedia). will play a critical role in worldwide commerce in general.6 billion in revenue by 2002. Cambridge. the Internet is expected to generate approximately $967. 13 . Such projections indicate that the time is right for heavy capital investments in online business-to-business auction models. world wide business-to-business E-commerce is expected to top $475. Mass.Business-to-Business It is now generally accepted that Internet related commerce is playing a growing role in business-to-business and consumer buying and selling. Forrester Research Inc. Internet Commerce Forcast 2002 2001 2000 1999 0 200000 400000 600000 800000 1000000 Year B to C B to B Millions of Dollars Internet Related Market Growth – Business-to-Business and Business-to-Consumer (Source: Giga Information Group) The online auction community stands to play a major role in e-commerce. staff reporter for The Wall Street Journal. Currently. In the US alone.AviaBid. David Beirne. recently predicted that business-to-business online auctions will account for $52.5 billion in commerce by the year 2002 (Giga Information Group).9 billion in commerce. This is a substantial part of the overall e-commerce picture. In an online article written by George Anders. and within just a few years. in particular.0 billion – up from its 1997 estimated $8. the Internet accounts for approximately $134.4 Internet Market Growth . In addition. was quoted as saying that the market could be as high as $380 billion in annual revenue by 2002..

5 Aviation and Aerospace Industry Analysis By almost every measure the aviation and aerospace industry is expected to grow rapidly over the next decade. This represent a 117% increase for units shipped and a 200% increase in revenue over the last ten years.96 billion dollars in 1991. and other aviation related goods – much of which will be distributed and served by e-commerce.AviaBid. which reflect a robust industry in which to exploit the business-to-business e-commerce initiative. Such increases in aircraft sales will spark future demand for aircraft parts. Imports and exports of aircraft and aerospace components continue to rise.5.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 4.1 Aircraft Shipment and Billing General aviation shipments of new aircraft have been on a steady climb since the early 1990’s. 4. from 1021 units and slightly over 1.com . Shipment of New U. to 2220 units and 5.87 billion dollars in 1998.S. services. Manufactured General Aviation and Factory Net Billings 7000 6000 Unit(Thousands) and Dollars(Millions) 5000 4000 Units Shipped Billing Dollars $Millions 3000 2000 1000 0 1990 1991 1992 1993 1994 Year 1995 1996 1997 1998 Source: General Aviation Manufacturers Association (GAMA) 14 . Aircraft shipment and billing have been on the rise since the early 90's and will continue to do so.

Total Number of Pilots 800000 Number of Pilots 700000 600000 500000 400000 300000 200000 100000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 Year Total Pilots Year Source: General Aviation Manufacturers Association (GAMA) 15 . hours per aircraft flown per year stood at 144 hours compared to 136 in 1994.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 4. Again. commercial airline transport.5. which has manifested itself in the prevailing increase for their demand. helicopter (only). and flight instructor pilots. instrument rated. In 1997.AviaBid.5.com . recreational. glider (only). this market is readily served by e-commerce business-to-business initiatives.3 Pilots Certifications and Aviation Support Personnel The total number of pilots.2 Aircraft Fleet and Flight Hours Although there has been a modest increase in the number of active general aviation aircraft flying. which may prompt an increase in demand for spare parts and services bought and sold in the open market. which include students. lighter than air. This represents an increase in per aircraft usage. private. have been on a gradual decrease. General Aviation Active Aircraft and Flight Hours per Aircracft per year 250000 Active Aircraft (Estimated) 200000 150000 100000 50000 0 1993 1994 1995 Year 1996 1997 146 Hours Flown per Aircraft (Esimated) 144 142 140 138 136 134 132 Year Active Aircraft (Estimated) Avg Hrs/Aircraft Source: General Aviation Manufacturers Association (GAMA) 4. the number of hours flown shows an upward trend on a per aircraft basis.

This trend is expected to continue st well into the 21 century. based on data from the U.092 794 148 30 81 2758 2677 81 15845 690 Source: Aerospace Industries Association.492 29.986 7 6319 1899 3432 449 540 3767 3729 38 11476 418 Source: Aerospace Industries Association.050 17.931 598 82 1111 14 2386 2292 94 9628 300 1995 $33. &Parts 1994 $12. Rockets. &Parts 1994 $37. Department of Commerce U.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 4. based on data from the U.624 598 212 25 84 1996 1912 84 11965 405 1997 $50.4 Import and Export of Aerospace Products U.S.112 21.079 12. 1998 imports of aviation goods and services reached almost $22 billion while exports soared to almost $59 billion.000 $60.000 $40.373 30.960 48.S.606 593 170 876 29 1750 1661 89 10613 436 1996 $40. Imports of Aerospace Products (Millions of Dollars) Total Imports Military Aircraft Civil Aircraft Transports General Aviation Helicopters Other Aircraft Engines Turbine Piston Aircraft & Engine Parts Spacecraft. US Aerospace Imports and Exports in Millions of Dollars $70.000 $10.075 23. Missiles.5.275 10.000 $50.737 15.AviaBid.509 64 3482 972 1449 300 771 1828 1774 55 5745 379 1996 $13.000 $30. Department of Commerce Dollars (Million) Aviation related imports and exports have been on the rise since 1995.363 22 3787 1361 1711 317 398 2775 2691 84 5377 401 1995 $11.S.071 25. Export of Aerospace Products (Millions of Dollars) Total Exports Total Civil Exports Complete Aircraft Transports General Aviation Helicopters Used Aircraft Other Aircraft Aircraft Engines Turbine Piston Aircraft & Engine Parts Spacecraft.270 29.000 $0 1994 1995 1996 Year Total Imports Total Exports 1997 1998 16 . and represents a robust aviation economy in which to exploit the B2B e-commerce initiative.com .374 40.028 946 207 22 97 2092 1995 97 14373 498 1998 $58.111 13.119 27.000 $20.134 13 4656 1067 2514 460 615 2987 2943 45 9904 574 1998 $21.477 15.668 24 3924 823 2136 361 604 2007 1937 70 7339 375 1997 $18.S. Satellite.

and hours flown from 1995 to 2010. Projected Number of Active pilots Active Number of Pilots (Thousands) 750 700 650 600 550 1995 1997 1999 2001 2003 2005 2007 2009 The number of active pilots is expected to grow from approximately 616 thousand in 1997 to 735 thousand in 2010. Year Source: GAMA Projected Number of Active Aircraft 230 220 210 200 190 180 170 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Number of Active Aircraft (Thousands) The number of active aircraft is also expected to grow by 12% over the period from 1999 to 2010. This represents a 19% increase over this period. Below is a historical and forecasted outlook for all aircraft categories. Source: GAMA Year 17 . from 197 thousand to almost 221 thousand aircraft.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 4. active pilots.5 Aviation Industry Forecasts By almost every measure.5. the aviation and aerospace industry will continue to grow.com .7 million hours to 34. Year Source: GAMA Project Number of Flight Hours Flight Hour Flown (Millions) 40 35 30 25 20 15 10 5 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Total hours flown will also continue to increase from 28.1 million hours over the 1999 to 2010 period.AviaBid. This demand increase is consistent with the continued growth of International commerce.

com. such as buying and selling aircraft parts and services.com. This is typically done by getting vendors to competitively bid on request for quotes. At the highest levels. Most recently.com . Websites that offer such services for the aviation community are Avsupport. The business-to-business players in this group are TradeOut.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace The aviation industry will continue to grow in step with the demands placed on it by the growth of national and international commerce. Yahoo. apls.com.com. PurchasePro. IPLS. and with the revenue numbers that industry expert project. eBay has moved to participate in the business-to-business space with its introduction of eBayPro. but is a much more opportunistic one with respect to return on investment. that serve as parts locator services. Liquidation. There are industry players. but most of them tend to be general auction sites.com. Given the enormous potential of the market. Other players focus on the use of reverse auctions to facilitate procurement of goods and services. Chemdex.com.6 Industry Participants on the Internet The online auction space is relatively young. Aviation Network Online. 4.com.com. and WSDN. iMark. Amazon. Bcomm. Such growth speaks well for the need to implement e-commerce systems in order to support aviation related business exchanges.com. These sites are mainly person-to-person auctions. to name a few. Not all sites. The number of participants in this industry will continue to grow. 18 .com. These businessto-business sites tend to promote themselves as destinations for businesses to bid and/or liquidate idle inventory and high value capital equipment. the trend is accelerating.AviaBid. Findparts.com. The environment is such that there are many online auction sites. Aeroparts Locator. and list a wide variety of items for auction.com. which serve the needs of vertically focused industry groups. ILS. New entrants are entering this space in all industries. use the online auction model.com. and uBid. PartsBase. The online business-to-business model is a much more complicated one. None of these players focus on the aviation community. with a few exceptions – eBay being one of them. which claim to facilitate matching buyers and sellers. there seems to be plenty of room for new entrants. the online auction space is dominated by nationally recognized brands such as eBay. With respect to the business-to-business space. There are industry specific auction sites. Few of them address the specific needs of the aviation industry. PriceLine. and VirticalNet. and provide request for quote (RFQ) functionality. ComAuction.com. Spec2000. specifically aviation related.

com Strength Aviation Exchange is an online aviation auction site similar to AviaBid. 19 .The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 4. Weakness Analyses of AerospaceOnline. This implies a neglect to address the needs of the business-to-business community. Their inventory seams to be low to non-existent after many observational visits. Their interface does not allow for users to upload or view pictures of items for auction.com’s website show that its dependence and association with Vertical Net seems to have diluted its focus with respect to the aviation auction. Those that do exist are relatively new. financial resources.com . Direct examination of its product offerings with respect to the auctions shows that it fails to organize its listings in any meaningful manner with respect to aviation. and none of the competitors enjoy any real or perceived dominance within the aviation industry. It has a professional look and feel. Aviation Exchange has not employed the use of a reverse auction application within its site in order to allow for competitive bidding against request for quotes. Weakness Aviation Exchange does not appear to be marketing itself in any meaningful manner. Because of this it fails to deliver a true aviation auction experience. managerial. and deep industry knowledge.com Strength Vertical Net is considered one of the first business-to-business communities.com participates in an industry space with very few competitors with respect to online aviation auctions and industry market making exchanges.avi-x. and they do not appear to be making efforts to develop a community atmosphere for members to generate or exchange industry related information. AerospaceOnline. Vertical Net established a well known brand with excellent technical. Aviation Exchange www.com. Below is a list of potential competitors and a description of their perceived strengths and weaknesses. AerospaceOnline. Aviation Exchange appears to be targeting the person-to-person auction space. and appears to have a starting point to work with.com – a Community of VerticalNet.AviaBid. They are a publicly traded company with substantial backing by partners from a wide variety of industries.7 Competitive Analysis AviaBid.com is one of Vertical Net's vertically focused communities. AerospaceOnline.com seems to share the auction application with other vertical communities within Vertical Net.

Weaknesses Like most of the competitors listed. APLS is also too narrowly focused and does not plan to expand in order to serve the broader needs of the aviation and aerospace community.com Strength APLS is a flat fee subscription based parts locator service that allows its members to upload inventory and search for aircraft parts through a variety of search criteria. 20 . APLS also has an RFQ system that allows users to send a request for quote via e-mail or fax. Weaknesses Air Parts Locator is nothing more than a listing service. Among the services that AVsupport offers its members are free inventory uploads and listing.com Strength Air Parts Locator is a very simple and free parts listing service. and Master Cross Reference and parts search capabilities. it lacks a robust list of categories in which to list.aeropartslocator. AVsupport offers a wide array of fees based services to its users.com . however. AVsupport is well served by a founder that does have industry related experience in parts and logistics. it is not commissioned based and is too narrowly focused on aviation parts. It has no search functionality. Aircraft Parts Locator Service www. AVsupport does not market itself to the broader aviation community. it does not allow for competitive bidding on these quotes.AviaBid.apls.avsupport. Weaknesses Although APLS does have a request for quote system. Air Parts Locator www. email based request for quotes. and has no revenue generating model to speak of. Although they do offer a request for quote capability. to name a few. they do claim to be working on such a capability. The interface allows users to list items and browse through its listings.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace AVsupport www.com Strength Analysis of AVsupport indicates that they are one of the most well rounded of the list of potential competitors on the Internet. AVsupport does not offer an online auction service to its members.

They have the potential of bringing huge amounts of capital resources to bare on the implementation and marketing of their exchange deployment. The site does appear to have a large membership base. Inventory Locator Service (ILS) www. Currently. Up until then PartsBase.com’s strength lies in the financial recources and brand recognition that is offered by the two aerospace participants.com is too narrowly focused on aircraft parts. ILS has established long-standing and deep relationships with aircraft parts suppliers and purchasers. By virtue of their size. In January they have deployed traditional and reverse auction functionality for their website. It is targeted to go online by the summer of 2000. This fact violates one of the keys to the successful exchange – the ability to host a neutrally biased exchange. Weaknesses PartsBase. Weaknesses ILS does not appear to address the broader needs of the aviation community. 21 . We will differentiate ourselves and exploit this apparent weakness in our marketing programs. The user interface is well laid out and provides visitors with an easy way to search for parts.ilsmart.AviaBid.In this respect it excelled.com allows members to upload parts information by item.com has recently made a successful initial public offering. MyAircraft. They are highly focused on aircraft parts and do not seem to be in a position to quickly react in order to address the broader needs of the aviation community if they chose to do so. or allows users to send email file attachments containing inventory information.com Strenth MyAircraft. and i2. which it will leverage into a significant platform for business-to-business. ILS does not have an online auction that takes advantage of the dynamic price model in order to achieve price equilibriums in the aviation market. as is expected to leverage the funds in order to extend its business model and to further promote itself.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace PartsBase. these companies may bring the unwanted inertia that is already built into their organizations. These two companies also happen to be aerospace companies. PartsBase. They have been in business since 1979. United Technologies. and have significant experience in parts and logistics.com Strength By far the most substantial threat to us is PartsBase. which may play a significant role in reducing the speed and flexibility required to execute on internet time. are one of the first to develop an electronic marketplace for the aviation community.com .com.com will be a joint venture between Honeywell. Weaknesses The collaboration between the two large companies may pose a problem for a speedy implementation. Partsbase.com Strength ILS is considered an industry leader in the parts locator service. MyAircraft. and they may be perceived as non-neutral players in this space. it does not address the needs of the broader aviation and aerospace market.com was primarily a parts locator service .

Our forward auctions will be particularly desired by businesses seeking to turn excess inventory of capital goods and services on the open market and who wish to get the best price through the use of such a dynamic pricing environment. and the current competitive offerings.com is made up of two large companies. Since AAR is a big supplier of aerospace equipment. we feel that there is an opportunity to create efficiencies in the procurement cycle of the entire supply chain for the aviation community. 4. Again. Finance. Weaknesses Like MyAircraft. parts search. our reverse auctions will offer the same dynamic environment in which to participate.com Strength AeroSpan. Aerospan. AAR is a worldwide supplier of aircraft parts and components. this apparent conflict of interest can be taken advantage of in one of our marketing campaigns. What’s more. the needs of this market. which may pose a liability with respect to speed and flexibility. Sectors of the aviation and aerospace community that is not yet being served by a business-to-business presence on the Internet are: Computer and Electronic/Electrical Systems and Components Information and Software Automation Systems and Services Materials.com might also be perceived as hosting a non-neutral exchange community. and a significant opportunity exists for us to quickly move into this vast market. They apparently compliment each other with respect to the requirements needed to implement a business-to-business exchange. Chemicals and Hardware Manufacturers Ground Support/Airport Tools/Machines and Test Equipment Interior Equipment and Furnishings Insurance Aircraft Leasing. For purchasing organizations that want to shorten the buying cycle.AviaBid.com. Finally. we feel there is an unfulfilled need for a business-to-business presence that is focused on the broader needs of the aviation community. and Sales Modifications/Completions/Overhauls Catering and In-flight Services Aviation Training Software Engineering and Consulting Cargo and Logistics Services Aircraft and Aerospace Engineering 22 . and a database of maintenance and repair organization capabilities). MyAircraft.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace AeroSpan.com . These are business entities that will find immense value in a supply chain management system that will not require the purchase of expensive proprietary software. and for vendors of goods and services that wish to expand their markets. none of the industry competitors have deployed a component based open architecture supply chain management system the will serve the needs of small to medium size aviation and aerospace businesses.8 Opportunities Based upon an evaluation of the market.com is a venture between AAR and SITA set to launch in the summer of 2000. SITA positions itself as the world leader in delivering integrated information systems and telecommunications for the aerospace industry.com. Most buyers and sellers of aircraft parts seem to be fairly well served by features currently offered by our competitors (features such as request for quotes. We believe that there are broader sectors of the aviation and aerospace community that is not yet being served by our services. these two companies offer substantial resources to bare on the market. Like MyAircraft.

com . Subsystems. Organizations.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace Fuel Services Legal Services Consulting and Special Services Spacecraft and Launch Vehicles Ground Station/Tracking. need to be networked to the market so that all players are able to extract value from a centralized marketplace. and our supply chain initiative. We feel that we can play a value-added function in order to level the playing field for all members of the industry. Telemetry and Control Equipment Space Systems. Global Initiatives Aviation. the industry is highly fragmented. From a global perspective.AviaBid. large and small. by its very nature. Components and Equipment Space Insurance Space Consultants and Special Services These unfulfilled sectors offer fertile ground to exploit the first mover advantage for our forward and reverse auction models. is a global industry. 23 .

that the market is sufficiently large enough to accommodate several market players. This strategy will serve to build our brand.com also posses a threat to us. Currently. We posses the first mover advantage with respect to our target market. and they seem to lack the focus required to address the needs of the broader aviation community.AviaBid. as seen on our website. AAR. If a competitive response does occur. however. or as yet to be developed relationships. and pricing. We feel.com . can be easily remedied. and SITA. and their partners in order to build the businessto-business architecture. if they so choose. they do not deploy a reverse auction model for purchasing professionals to use.com. These competitors are backed by corporations such as United Technologies. and there is a good chance that the competition may not respond at all. This will allow us to fully develop our product while our competition looks the other way. Oracle Corporation. which is a subset of the market we aim to serve. and will be the first of its kind to serve the target market – business-to-business for the broader aviation and aerospace industry. One of the consequences of such a move will be for our competitors to raise barriers to entry. aggressive sales. They are much too focused on serving a very narrow and crowded market. currently in development.1 Competitive Advantages In comparison to our primary competitors. which we will not be able to overcome due to our limited resources.9 Threats and Risks It is possible that one or more existing competitors will react to our entrance into the business-to-business market. and that the market is still in its infancy. We will use leading technologies from Ariba. because of our relatively small anticipated initial market share. and through the use of partnership strategies. They have the required technology in order to extend into the broader reaches of the aviation market. it is most likely to be in the form of a strategic leveraging of existing. The competitive reaction that would be most threatening would be for one or more of our competitors to mobilize their resources in order to establish a presence that attempt to penetrate additional aviation industry sectors which they do not yet focus on. Because of their established market positions. in order to penetrate the market before we do. aggressively support our customers through the use of leading technologies. 5. however.AeroSpan. This will help us move quickly and scale to the growing needs of the market. They do have an online auction that serve the aviation community. has a very significant online presence. we feel a swift competitive response is unlikely. is the only one of its kind on the market today – serving the buying and selling needs of the aviation enthusiast and professional buyer and seller. • • 24 .com. market growth through promotion. This summer we anticipate the entrance of two more competitors .The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 4.com and MyAircraft. Honeywell. Our current product. for example. Particularly important are the following key advantages: • • • The time is right to be a small organization in an industry that rewards speed and execution. 5. we posses key competitive capabilities that will go a long way to ensuring the success of our business. This is one weakness that. The business-to-business product. none of our competitors are making any attempt to serve the broader needs of the aviation and aerospace community. We possess the business expertise with respect to supply chain management and integration. However. VerticalNet’s AerospaceOnline. Our small size allows us to move quickly and relatively unnoticed for the time being.0 Marketing Strategy and Implementation Summary We plan to use a multi-pronged and layered approach in our marketing strategy. PartsBase. a strong competitive reaction could be a formidable threat.

com will be combined with a marketing plan that will support the brand building strategy. since our technology provider specializes in auction applications. Our philosophy going forward is to outsource as much of the technology as possible through the use of well established application service providers (ASP's). our management team is a young but seasoned and committed group of professionals in the technology industry with management and director positions in sales and marketing and strategic planning – two of them are pilots with a fond appreciation for aviation as well.com . Finally. and administrative personnel. new. and leveraging these relationships in order to create and grow the exchange market of buyers and sellers. We employ the use of a technology provider to supply the auction application. and commit motivated professionals to support and satisfy this growing membership. The fact that we are a pure Internet company with no pre-existing organizational inertia means that we are able to move quickly in order to adjust to changing market conditions. sales. and technology strategically acquiring complimentary technologies and business enterprises which are tightly aligned with our goals and who would otherwise compete with us 25 . Lack of financial resources will limit our ability to implement. We believe that it is pure folly to try and build a solid brand name without supporting it with world class customer service and superior technology. unlike some of our more established competitors.2 Competitive Weakness Our financial position is a relative weakness. 5. To this end we will implement technology that is reliable and scales to the growing needs of our members. Our plan to implement AviaBid.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace Being a new entrant into this field has obvious disadvantages. and extend our Internet and business applications as well as limiting our ability to execute our marketing strategy. We will capture and secure broader markets by • • • deploying a talented and knowledgeable sales force in order to bring buyers and sellers into the community partnering with industry leaders in aviation. 5.3 Key Strategies Our strategy is to build a brand recognition that closely links e-commerce and e-content with aviation buying and selling. Not having to expend such resources allows us to focus our energies for developing sales and marketing strategies in order to penetrate and grow our market. nurturing these relationships. and hiring much needed technology. we are in a position to adopt new and innovative ideas. The lack of brand recognition will make it more difficult to establish the credibility needed to form strategic partnerships and acquire more customers in the business-to-business sector. We can design our business from scratch and position ourselves to take advantage of recent changes in the market and the knowledge of the current positioning of the other competitors. Being a young. improve. since our technology provider is committed to continuously improving their product for us as well as customizing it to fit our changing needs. This is a very important competitive consideration. Our brand is not well known to the industry. Our competitive edge also lies in our ability to move fast to implement strategy. Being a new business means that we have yet to establish brand recognition. but it also has advantages. aerospace. There is no need to waste valuable resources in upgrading and improving the technology. and forward looking company.AviaBid. It also allows us to follow a fresh approach to business that is more appropriate to the market needs of today’s customers. We feel that it is important to concentrate on the business of establishing firm relationships in the aviation community.

industry trade shows Cross branding and integrating complimentary services with strong industry partners Consistent use of Internet advertising through the use of targeted and interactive banner ads to build awareness Intense and broad advertising in industry related print periodicals and news letters Sponsorship of air show events Sponsorship of aerobatics and air racing teams with the use AviaBid. e-commerce.AviaBid. we will use existing but cutting edge technologies provided by best of bread technology providers in order to provide a common trading hub. where multiple buyers and sellers can come together without compromising processes and relationships among the industry participants.com .3.com to provide the customized store in order handle inventory and order fulfillment 5. We will also commit to staffing a call center around the clock with customer service professionals in order to meet the unexpected needs of our members.3.com will employ the use of component object model (COM) technologies that is easily maintainable and scales to the needs of a fast growing and complex market community. we will make use of enabling technologies provided by industry leading partners such as Oracle Service technologies. 26 .2 Implementing Customer Service and Supporting Technologies Aviabid.com branded merchandise – we will use the services of StarBelly.com brand name and trademark.com will make creative use of the following media for building and strengthening the brand equity: • • • • • • • • • • Consistent participation in. and the AviaBid.1 Implementing the Brand Building Strategy Our brand building strategy will focus on creating a strong association between aviation. AviaBid. and sponsorship of.com’s distinct trade mark logo Sponsor and make charitable contributions to aviation academic scholarship programs Participation and sponsorship of academic business research at major universities Selling and giving away branded merchandise Use of an online store to sell AviaBid.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace Finally. 5. In order to react to the needs of our community.

Competitors that hold week positions but posses clients and/or complimentary technologies and human resources that will strengthen our position in the industry should be acquired.3 Implementing Market Growing Strategies In order to capture.AviaBid. Engine. and Systems Airborne Structural/Mechanical Components Computer and Electronic/Electrical Systems and Components Information and Software Automation Systems and Services Material. web-based reporting. negotiations. In addition.com . It will serve our advantage to cross brand with such companies in order to extend our message and grow our market. auctions. and secure our target market. The aviation and aerospace industry sectors that we will serve are: • • • • • • • • • • • • • • • • • • • • • • Airframe. grow. Subsystems. 27 . workflow management. Telemetry and Control Equipment Space Systems. Chemicals and Hardware Manufacturers Ground Support/Airport.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 5. This will allow us to customize processes such as online quoting and bidding. This will save us time and financial resources in the long run that would otherwise be required in order to capture the market through competitive spending. and virtual procurement systems. Tools/Machines and Test Equipment Interior Equipment and Furnishings Insurance Aircraft Leasing Modifications/Completions/Overhauls Catering and In-flight Services Aviation Training Software Engineering and Consulting Cargo and Logistics Services Aircraft and Aerospace Engineering Legal Services Consulting and Special Services Spacecraft and Launch Vehicles Ground Station/Tracking. we will hire outstanding and best of breed sales people with expert knowledge in one or more of the industry sectors outlined below. Components and Equipment Space Insurance Space Consultants and Special Services Companies that hold strong positions in the industry and who compliment our product offerings will be sought in order to form strong strategic alliances and associate our brand with theirs.3. we will hire individuals with deep knowledge in the areas of logistics management and procurement processes.

this implies holding the physical auction at an airport. The online aviation auction model promises to make buying and selling aviation goods.com members and visitors will be provided with a well-rounded aviation related experience within the context of an e-commerce environment. 7days a week. Currently. which required buyers and sellers to take the time to travel to these airports – this presents an inconvenience in most cases. members will find a wealth of aviation related content provided by members as well as our site content editors. A key ingredient of our promotional strategy is to make use of the Internet to virally market our service through the use of an affiliate program. we have been able to generate average traffic levels of 6.half of which are repeat visitors. AviaBid. For aviation related auctions.5 Positioning Statement AviaBid. Buyers and sellers do not have to plan for and/or wait for specific auction dates.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 5. Sellers have the advantage of listing their goods and services at any time. 28 . As previously noted. which was met with good response from the market and resulted in a substantial increase in traffic to the website. from anywhere.4 Value Proposition AviaBid. The affiliate program will pay a nominal fee for every referral to AviaBid.com will position itself as the online aviation auction community and business-to-business marketplace. convenient. and capital equipment more efficient.com auctions can be accessed from the convenience of home or office. AviaBid. Auctions are held 24 hours a day. and establishing and cultivating the AviaBid.com .com from another website that results in a registered member. and 365 days a year. and effective. and expand their markets.com members will also find value in the amount of information provided during their visit to the site. AviaBid. Thus far AviaBid.com’s value proposition is based on the inherent benefit derived from the convenience of doing business on the Internet. 5. Unlike other aviation auction sites. 5. Through these methods alone. AviaBid. we are in the process of introducing ourselves to the market. cultivating partnerships and strategic relationships. manage relationships. services.000 visitors a month during our first two months of operation .6 Promotion Our promotion strategy will require a multi-dimensional and phased approach that involves introducing ourselves to the market. and to a much broader audience of buyers – this expands the seller’s distribution of goods by several orders of magnitude.com has a 10% registration rate. developing awareness. In the minds of the aviation community. Members will be provided free coverage of business and consumer oriented news and product information. we will be perceived as a destination for consumer and business-to-business buying and selling. In all.com is also engaged in the use of several link and banner exchange networks.com brand. Buyers have the advantage of visiting a destination that is not out of the way. We have registered with most of the world’s search engines and are in the process of adding ourselves to as many of the aviation relate website directories as possible.com will provide a community environment for members to network and post and/or access industry related market information. AviaBid. Traditional auction houses required the hosting auction house to plan for and schedule an appropriate venue. manage their purchasing programs.AviaBid. This required us to launch a press release.

initiate partnerships.3. Flight Training Magazine. Aviation Week & Space Technology. Such publications include Flying Magazine.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace AviaBid. but in every case.com plans on advertising on most of the major aviation periodicals and websites.3.AviaBid.com plans to advertise on most of the major aviation and Internet related print publications. Busineses2. we charge nominal fees for showcase and feature auction listings.0.com brand. Pacific Flyer is a monthly publication with a circulation of over 100. The magazine features many aviation related articles and is a magazine rich with aircraft and parts advertisement. aviation and aerospace trade shows.com demonstrates a scheduled online reverse auction. our business-to-business revenue-generating model is based on: 29 . The Industry Standard. which attract aviation enthusiast and professionals. In short. and quite possibly auto-racing teams. we have adopted a pricing strategy that generates revenue based on enhanced listing options and commission fees. however. and offer promotional merchandise. Five pre-qualified vendors are invited to bid against each other through two rounds of bidding on a request for quote in real time. we reserve the right to structure the fees on a customer by customer basis. in order to expose event patrons to AviaBid. AviaBid. Our presence at these events will also provide AviaBid. because of limited financial resource. For this trade shows.com to a broad aviation and Internet audience while building and maintaining the AviaBid. Yet another avenue to explore is to sponsor air-racing teams. With respect to banner adverting. and other industry related publications that serve each of the sectors mentioned is section 5.com will aggressively promote itself at aviation-related events such as air shows.7 Pricing Consumer-to-Consumer and Business-to-Consumer With respect to the forward auction model that has already been implemented. For example. Plane & Pilot. since there is a strong correlation between aviation enthusiasts and auto-racing fans. We do not charge for basic listings. In every case. for now we will limit ourselves to advertising in the Pacific Flyer Magazine. The exhibits can be used to register new members. Consider an aviation industry trade show attended by industry suppliers and buyers of parts and services from a broad spectrum of the aviation community. Our goal here is to establish a permanent presence at these events in order to extend and reinforce the AviaBid. and other events. and we will implement a flexible pricing strategy that is consistent with the norms of each industry sector. Speed News.com brand.000. These highly regarded and branded national and international publications will expose AviaBid. Readers of this magazine fit our demographic target. and will be negotiated based on the level of service that the client agrees to. we will charge a nominal advertising rate based the positioning of the banner ad.com sales staff and marketing personnel the opportunity to establish valuable relationship that will lead to industry partnerships and marketing opportunities. AviaBid. Pricing for sponsoring areas of the auction site will be negotiated on a client by client basis. The winning bidder is determined by the lowest and/or most favorable bid as determined by the buyer. In the future. Let’s consider a scenario.com . There are several ways of doing this – one is by establishing a continuous presence at trade show events supported by Internet connections. Eventually. Business-to-Business Our business-to-business pricing strategy will be service based. AviaBid. 5.com. we've been charging a 2% commission fee on every item sold at our auctions since January of 2000.

30 . This will be critical to generating transactional revenues. In this way. Advertising – revenue gained from selling advertising space on our website. In every case. Selling highly specialized forms of this information on a subscription bases will form another revenue stream for us. In every case. and logistics management. The outside sales staff will travel to trade shows and other related events in order to help create new leads. they will be able to model the needs of perspective buyers and sellers. The sales force will be required to perform a needs analysis of each perspective member of the community. In order for the buying and selling community to bring efficiencies to the marketplace. tradeshow appearances. after which.revenue generated from our dynamic pricing model will be generated through commissions. The program will make use of advertising.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace • • • • • Transactions – these are fees extracted from the market along the entire supply chain. the sales force will provide continuous feedback to marketing so that we may continuously improve our product. A good motivational tool will be for our sales force to extract short and long-term financial rewards from each of the buyer's and vendors that it brings into the community. we need to motivate our sales force to bring an ever-increasing number of buyers and sellers to the community. Service Level Fee arrangements – revenue from various levels of services. workflow.AviaBid. Highly Specialized Market News and Information – As a market maker.8 Sales and Marketing Programs Our marketing strategy will be supported by a tightly integrated sales and marketing program. Critical to the success of our business is the speed with which we achieve critical mass numbers with respect to membership and site traffic. 5. we will be able to capture. Allowing the sales force to financially benefit from the continued success of each vendor will provide the incentive for each sales person to aggressively penetrate the market.com . This will form a very substantial part of our revenue base as our market space approaches a critical mass of transacting members Commissions based on our auctions . and sponsorship of industry related events. the sales force will be a valuable resource in our marketing effort. This will help close the loop between market research and information gained from point of sales and face-to-face meetings with potential customers. The sales force will be made up of inside and outside sales staff. such as supply chain integration and/or catalog and other content management implementations. Each sales person will receive a bonus for signing on a new buyer or seller into the community. they will receive a percentage of each sale of goods and/or services sold by community sellers to community buyers over a specified period of time. categorize and archive information that will be of value to members of the exchange community. In both cases they will be qualified and knowledgeable in the areas of purchasing.

This forecast is based on historical figures provided by the Aerospace Industries Association. We are assuming that we will be well capitalized through private placement and public investments. Keep in mind that these figures do not include dollars from services associated with the aviation and aerospace industry.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 5. Also keep in mind that such multiplying effects will serve to strengthen our revenue base. which include services. which will allow us to market ourselves and implement readily available technology.AviaBid.S. If we capture 40% of the potential market. Including such figures will undoubtedly inflate the dollar figures shown below due to the multiplying effect that sales and servicing of aircraft and aircraft parts have on the aviation and aerospace industry as a whole.4).com . since it is the general aviation and aerospace markets. then our revenue projections reflect positive growth consistent with that of the industry and the implementation of the e-commerce initiative.9 Sales Forecast Our sales forecast model is based on the potential of the market. Below is a forecast model of total import and exports dollars for aviation aircraft and aircraft parts. and is based on data from the U. Air c r a f t a n d Air c r a f t P a r t s H is t o r ic a l a n d P r o je c te d D o lla r s (Im p o r t a n d E x p o r t) D o e s n o t I n cl u d e S e rvi ce s 160000 140000 120000 100000 80000 60000 40000 20000 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2002 2004 Dollars in Millions To ta l Im p o rts To ta l E xp o rts C o m b ine d D o lla rs H isto rica l a n d F o rca ste d D o lla rs fo r A ircra ft P a rts O n ly (Im p o rt a n d Ex p o rt) 80000 70000 Dollars in Millions 60000 50000 40000 30000 20000 10000 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 To ta l Ex p o r ts o f A /C Pa r ts To ta l Imp o r t o f A /C Pa r ts Co mb in e d Do lla r s o f A /C Pa r ts 31 . that we plan be target in addition to aircraft parts.4. Department of Commerce (See section 4.

TAM 1% Fee 40% 2% Fee 40% 2000 $500 $2 $4 2001 $1.500 $46 $92 2004 $14. and other goods and services that are not directly related to aviation. information systems equipment and services.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace The projections shown below are based on us capturing 40% of the total business-to-business market and extracting an average of 1% or 2% on every transaction taking place in the trading community. These goods and services may include services such as engineering consulting. but that may just as easily qualify as goods and services bought and sold within our trading community. Again. we feel that these numbers do not include other goods and services that are involved in supporting aviation related business. Forrester research has predicted that online business-tobusiness transaction revenues will top $14.500 $6 $12 2002 $6.AviaBid.com .100 $24 $49 2003 $11.500 $58 $116 32 .5 billion.

Achieve staffing levels required for a functional executive and administrative staff by the end of our first fiscal quarter.com brand Pre-qualify 5000 aviation related vendors and suppliers in the United States in preparation for the launch of AviaBid. 6.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 5. and Systems Airborne Structural/Mechanical Components Computer and Electronic/Electrical Systems and Components Information and Software Automation Systems and Services Material. 2. Extend the existing auction application so that it is a fully recognized brand in the aviation and aerospace marketplace.this will be done with the help of technology from Ariba Corporation and the use of Oracle’s e-Business 11i ERP applications platform and 8i database. Engine. Deploy the business-to-business (AviaBid.com B2B) architecture through the use of component object model technologies within 60 days .10 Milestones Significant and measurable milestones to be achieved over the next two fiscal quarters after our fist round of equity finance is to: 1. Tools/Machines and Test Equipment Interior Equipment and Furnishings Insurance Aircraft Leasing Modifications/Completions/Overhauls Aviation Training Software Engineering and Consulting Legal Services Consulting and Special Services 3.com B2B.com B2B Deploy a functional sales force in order to penetrate the following sub-sectors of the aviation/aerospace industry and pre-qualify members of these sub-sectors as buyers and sellers as part of the 5th and 6th milestone : Airframe. Partner and begin integrating with existing land based auction houses in order to extend the AviaBid. Register 10.com . 5. and reach sustained registration rates of over 3000 new members a month. 7.000 individual users with AviaBid. Chemicals and Hardware Manufacturers Ground Support/Airport.AviaBid. 4. 33 .

product development.com . President. where he studied information systems and business administration. McIntyre has over eight years of management experience in the Internet and technology industry. Currently. which are outlined in this section and which we hope to fill in the very near future. Before attending Western International University. marketing.’s $2 billion Integrated Material Services (IMS) group. McIntyre is the developer of the current Performa system utilized by Avnet’s global sales force and continues to lead his organization in strengthening profitability goals by implementing an activity based costing system.0 Management and Organizational Summary Our management team includes three individuals whose combined background represent 20 years of professional experience in operations. He was responsible for all aspects of bringing new products to market including pricing.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 6.AviaBid. McIntyre is currently the head of marketing and finance for Avnet Inc. David McIntyre. Some of his responsibilities will include: • Building superior brand recognition in the marketplace as the highest quality Internet company dedicated to the needs of the online aviation buying and selling community. Marco studied in the Technology Management MBA program at the University of Phoenix. including production of Avnet’s Global Supply Chain magazine.com does have a few management gaps. This will include pro-actively positioning the organization as a trusted destination for aviation business-to-business. invoicing. Negotiating and managing several strategic partnerships were also an important aspect of his responsibilities. Marco attended Arizona State University. CEO Marco Santiago Jr. Mr. promotion. Marco will be responsible for the overall management of the company. He was instrumental in the creation and implementation of Intel Corporation’s business and marketing plans from 1992-1997. Marco is a licensed pilot and a former USAF Reserve and Arizona Air National Guard crew chief on C-5 and C-141 aircraft. business development. Our organizational structure reflects a relatively flat organization in order to enhance our ability to react and move quickly to changing market conditions. and information technology. He was employed as a programmer analyst for the Adaptive Broadband Corporation from August 1996 to February of 2000. McIntyre leads his organization by developing best in class supply chain integration for tier one customers including electronic forecasts.1 Management Team Marco Santiago Jr. He specialized in the Aerospace & Military market segment and worked with several electronic original equipment manufacturers. Mr. He is currently responsible for all strategic and promotional marketing. Mr. launched AviaBid. and payment. David McIntyre will partner with the CEO to develop the company's overall global marketing strategy. He currently negotiates these strategic partnerships by helping customers understand their total cost of ownership. Avnet’s IMS group is a world-class supplier of supply-chain logistics and utilizes EDI and the Internet for supply-chain integration.com as a venture. and distribution.com on August 3rd 1999. Marco is currently a senior consultant in the Global Customer Relationship Management (CRM) group at the Oracle Corporation. 6.. Before devoting himself full time to the development of AviaBid. McIntyre has been extensively trained in executive level MBA classes from The Anderson School at UCLA and holds a BS in Electrical Engineering from Kansas State University. triggering. He is a graduate of Western International University. where he majored in aerospace engineering and applied mathematics. Vice President Marketing Mr. set the strategic agenda. AviaBid. 34 . Mr. and work closely with the executive staff and the board of directors to navigate the financial and legal waters associated with taking the company to its initial public offering.

The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace • • • • • • Creating a proactive marketing function that will emphasize our broad mission and serve as a spokesperson to industry professionals and the media to promote our services. Select and manage the company's relationship with outside advertising and public relations firms. Kim Bozik will be responsible for defining.com . process and workflow management. For the past 4 years he has held product marketing. 35 . He was a senior systems engineer with Honeywell for 8 years and was a key member of inertial navigation equipment development and deployment in the space industry. Generating positive media opportunities for the Company and their users. Through these assignments he has successfully brought semiconductor and liquid crystal display technologies to the marketplace. web based reporting functions. online user newsletters. This will include generating specifications for quote and bid processing. In addition. Currently Kim is a senior strategic demand analyst for Intel and is responsible for determining market trends and effects on factory development and capital purchase needs. Working closely with the sales organization to develop outstanding promotional plans. technical marketing and marketing management positions with Intel. understanding the impact of webbased interactive marketing and how that compliments traditional media. Vice President Operations and Community Logistics Kim Bozik has over 12 years experience in product development. targeted direct mail campaigns. and relationship management. collateral materials and marketing presentations for all of the company's products and services. Kim B. registration and administration. He holds a Master of Science in Engineering Management from the University of South Florida and a Bachelors degree in Electrical Engineering from the Florida Institute of Technology. corporate prospects and all other appropriate media outlets/constituencies. Kim's background also includes knowledge of the general aviation industry through a previous family flight instruction business. Working on the identification and selection of key media partners. investor relations. customizing. Motorola and Three-Five Systems. online negotiations. Bozik. Drafting and releasing press materials to news wires. His responsibilities include modeling the various purchasing and procurement functions of participating business within the community. marketing and operations with Fortune 500 companies and an emerging technology company.AviaBid. and implementing the community functions related to the needs of the buyers and sellers within the community.

Human Resources 36 .Mr. and sales channel strategy. 6. accounts payable. President & CEO. McIntyre created and helped guide the implementation of Interliant’s marketing plan. and/or general ledger systems. and Columbia Capital Partners and currently servers over 40. This candidate will also develop sales programs and milestones to meet projected revenue targets. we have one confirmed member and several pending. Specific responsibilities include the following: • • • • • • Assist the product team with incorporating financial aspects to its Internet based service offering Help fill out the system that will track customer transactions and ensure full payment upon transaction execution. It is our intent to form an executive level panel that has implemented similar strategies and that has experience in the Internet industry.. Thus far we have the following member . The ideal candidate will posses an MBA in finance and have experience in the creation and implementation of cost accounting. First Union Capital Partners. He has been a featured speaker at Internet conferences and trade shows. Director. Mr. Chief Financial Officer The CFO will be responsible for all functions involved in finance for the company.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 6. Affinity is backed by a premier group of investors including JPMorgan Capital. McIntyre was a key part of the founding management team for Interliant. we are developing an advisory board to help execute our plan. and work closely with the CEO in order to develop strategic relationships and alliances that will compliment our product offerings. Performing basic financial management functions and help create a robust and scalable accounting system Playing an integral role in taking the company up to and through its initial public offering Assist with general administrative management functions (such as dealing with the outsourced HR and employee benefits packages company).000 customers worldwide. which we hope to address in the very near future: Vice President of Sales and Business Development The vice president of sales and business development will be responsible for developing and managing the sales force. John McIntyre. Mr.3 Management Team Gaps We currently have gaps in the following key executive positions.net: Mr. Inc. Presently. Inc. His work was instrumental in helping the company grow from start-up to over $25M in revenue in 12 months. eBiz. a leading web and applications hosting provider for small and medium-sized businesses. including the company’s mission. Mr. The candidate should also have background and experience in the application of these functions with the use of current information technology systems. Prior to Affinity.AviaBid. McIntyre has over eight years of management experience in the Internet and telecommunications industry. This board of advisors will be available to help facilitate a well managed organization. Mr. Be a general resource to work closely with the CEO. work closely with marketing to coordinate trade show appearances and provide research assistance to the product development team. John McIntyre.com . McIntyre founded Affinity Internet.2 Advisory Board Currently. now a public company. McIntyre holds an MBA from Harvard University and a BS in Industrial Engineering. marketing strategy.

and the product development team will participate with the sales and marketing departments to extract product requirements from customer input. installation and customer care. the candidate should be well versed with the needs of a fast-passed needs of an Internet start-up. The Vice President of Product Development and CTO. sales support. This person will be responsible for organizing and maintaining content schedule. with specific focus on field locations and benefits administration and benefits program design. The successful candidates will have a minimum of eight years of HR generalist experience.com executive staff members and members of the industry community of aggregate industry activity and trends. The position will also be responsible for other aspects of company operations .AviaBid. organizational development recommendations. featuring daily and weekly deadlines for the website. schedules and execution. the CIO will be expected to identify the strategic technology needs of AviaBid. the Director will be responsible for ensuring that all organizational and employee requirements are met. Vice President.com and its partners. Chief Information Officer The CIO will be responsible for analysis of our information needs.com . with specific focus on recruiting. technical definitions. and employee relations. Director. very broad benefits administration and design. Human Resources Services will be responsible for supporting the human capital needs and employee welfare of the organization. experience with Internet start-ups. including talent pool management. Aside from the daily operational demands. employee relations. They will work closely with the operations team to perform product applications testing and production deployment. and work with the information services staff and contractors to meet those needs.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace The Director. define system requirements. The candidate should be able to demonstrate successes in several of the following areas of activity: recruiting. The development team will also assist others in developing integration and training plan. Product Development and Chief Technology Officer The Vice President of Product Development is responsible for all aspects of product development and issues as they relate to the technology of the exchange. This position will also be heavily involved in industry analysis to the extent that he/she will inform AviaBid. including planning. Content Management and Analysis The Director of web content management and analysis will direct a staff of industry writers who will inform and entertain members of the website's community. The development team then translates product requirements into product specifications. assessment techniques and recruiter management. The ideal candidate will have 3 to 5 years related experience as editor and/or writer for a major aviation publication.this includes product planning. Specifically. and working with senior management to develop plans and budgets to implement business critical e-business systems. Specifically. staffing. 37 . The Vice President and the product development team own and manage the entire development process from product specification through unit testing.

business applications development and support. accounting and bookkeeping. 6. The specific positions to be filled during this period are: • • • • • • • • Receptionist and Office Administer at $26.000/Yr Customer Service Administrator at $26. A total of six support personnel will be hired within the first 3 months after our fist round of equity finance in order to accomplish ongoing operational functions such as sales and sales support.000/Yr Product Engineer and Developer at $55.000/Yr Staff Accountant at $40.000/Yr Sales Support Administrator at $26.000/Yr Network administrator and Infrastructure Specialist at $45.000/Yr Business Applications – Programmer/Analyst at $45.com . It illustrates the executive level offices that will execute the business plan.com’s organizational structure may be viewed in the appendix.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 6.000/Yr 38 . which includes stock options in order to help the recruitment effort. and marketing administration and support.5 Personnel Plans The company’s salary structure will reflect very competitive rates with respect to the prevailing market. general administration.000/Yr Marketing Administrator at $40.4 Organizational Structure AviaBid. and we will offer a very competitive benefit package. The compensation philosophy will also help us retain employees and maintain an experienced staff.AviaBid.

7. These percentages are based the operational history of a number of composite competitor providers and include estimates for developing the infrastructure required to execute our business strategy.4 million. while revenue for 2001 is projected to be $24.1 million. 39 . the company plans to turn cash flow positive by the end of the first operating year.1 Assumptions Other major assumptions to the plan include: • Operating costs are modeled on a percentage of revenues.AviaBid. 2000 $500 $4 $2 $1 $8 $4 $1 2001 $1.1 million based upon a starting date in April.com's projected financial results are based on receiving approximately $795 thousand of initial start up capital financing with two follow on rounds of $700 thousand in four month intervals for a total investment of $2. $58 million. Since we are not taking ownership of the product. Barring additional investment or acquisitions. • A corporate tax rate of 40% is built into the model. We believe the multiple opportunities for value creation and the number of exit strategy options makes our plan an attractive opportunity to capitalize on the exponential growth of the Internet and participate in the early stages of one of the fastest growing markets in history. • We plan to lease the majority of equipment.100 $49 $24 $6 $98 $49 $6 2003 $11. Revenue for the years 2002 through 2004 is currently based on an organic growth model.500 $92 $46 $12 $184 $92 $12 2004 $14. we have calculated a 0% bad debt expense.0 Financial Plans We have developed financial projections for the period April 2000 through April 2004. we assumed no depreciation of capital assets. • Bad debt expense has been modeled at 0% of revenue. and is projected to be $46 million.500 $116 $58 $15 $232 $116 $15 TAM 1% Fee 80% 40% 10% 2% Fee 80% 40% 10% AviaBid. • Sales projections are based upon obtaining a service fee of 1% and capturing a 40% market share in the B2B Aerospace & Defense market. and $78 million.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 7.500 $12 $6 $2 $24 $12 $2 2002 $6. therefore.com . Organic growth is derived from forecasted industry growth rates. Revenue for the year 2000 is projected to be $3. respectively.

.

892 FY2001 FY2002 $24.-----------$382 $545 -----------.-----------.400 $20 $20 $20 $20 $20 $20 $20 $20 -----------.581 ($689) ($276) ($413) $202 $345 $180 $200 -----------.-----------$208 $208 $208 $208 $208 $208 $208 $208 $256 $600 $360 $996 $240 $12 $36 -----------$2.-----------.-----------$403 $563 $23.-----------.AviaBid.-----------.087 $15.500 $415 $575 $1.-----------.-----------.437 Sales Production Payroll Total Cost of Sales Gross Margin Operating expenses: Sales and Marketing Expenses Sales and Marketing Payroll Advertising/Promotion Travel & Entertainment Oracle Exchange Technology Support Internet Service Miscellaneous Total Sales and Marketing Expenses $208 General and Administrative Expenses General and Administrative Payroll Payroll Burden Depreciation Leased Equipment Purchased Equipment Utilities Insurance Supplies ERP/CRM Office Lease Total G&A Expenses $79 Other Expenses Other Payroll Contract/Consultants/Legal Total Other Expenses $21 $50 $30 $83 $20 $1 $3 ------------ $21 $50 $30 $83 $20 $1 $3 -----------$208 $21 $50 $30 $83 $20 $1 $3 -----------$208 $21 $50 $30 $83 $20 $1 $3 -----------$208 $21 $21 $21 $21 $21 $21 $21 $21 $50 $50 $50 $50 $50 $50 $50 $50 $30 $30 $30 $30 $30 $30 $30 $30 $83 $83 $83 $83 $83 $83 $83 $83 $20 $20 $20 $20 $20 $20 $20 $20 $1 $1 $1 $1 $1 $1 $1 $1 $3 $3 $3 $3 $3 $3 $3 $3 -----------.-----------.com .963 $7.-----------.-----------.000 $403 $563 -----------.-----------.000 $1.-----------.-----------$11 $11 $11 $11 $11 $11 $11 $11 -----------.200 $1.-----------$3.000 $500 $700 $14 $16 $60 $80 -----------.400 $46.-----------$5.558 $5 $6 -----------$11 -----------$298 $5 $6 -----------$11 -----------$298 ($312) $5 $6 -----------$11 -----------$298 ($309) ($124) ($185) $5 $6 -----------$11 -----------$298 ($304) ($122) ($182) $5 $5 $5 $5 $5 $5 $5 $5 $6 $6 $6 $6 $6 $6 $6 $6 -----------.137 $245 -----------$245 $2.247 $21 $10 $0 $3 $4 $2 $3 $1 $10 $26 ------------ $21 $10 $0 $3 $4 $2 $3 $1 $10 $26 -----------$79 $21 $10 $0 $3 $4 $2 $3 $1 $10 $26 -----------$79 $21 $10 $0 $3 $4 $2 $3 $1 $10 $26 -----------$79 $21 $21 $21 $21 $21 $21 $21 $21 $10 $10 $10 $10 $10 $10 $10 $10 $0 $0 $0 $0 $0 $0 $0 $0 $3 $3 $3 $3 $3 $3 $3 $3 $4 $4 $4 $4 $4 $4 $4 $4 $2 $2 $2 $2 $2 $2 $2 $2 $3 $3 $3 $3 $3 $3 $3 $3 $1 $1 $1 $1 $1 $1 $1 $1 $10 $10 $10 $10 $10 $10 $10 $10 $26 $26 $26 $26 $26 $26 $26 $26 -----------.-----------.180 $1.-----------.-----------$1.-----------.380 FY2000 $3.-----------.635 $23.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 7.-----------.-----------.-----------.585 $11.378 $39.402 $4.-----------.350 $18.-----------.-----------.081 $432 $649 $60 $72 -----------$132 -----------$3.-----------.-----------.034 $6.-----------$20 $20 $20 $20 $20 $20 $20 $20 $0 $10 $40 $60 $90 $180 $1.-----------.-----------.2 Projected Income Statement (000s omitted) Apr $5 $20 -----------$20 ($15) May $7 $20 -----------$20 ($13) Jun $10 $20 -----------$20 ($10) Jul $15 $20 -----------$20 ($5) Aug Sep Oct Nov Dec Jan Feb Mar $20 $30 $60 $80 $110 $200 $1.-----------.249 $1.997 $45.-----------.400 $414 $476 $1.-----------.-----------$79 $79 $79 $79 $79 $79 $79 $79 $246 $121 $0 $36 $48 $18 $36 $12 $120 $312 -----------$949 $409 $574 $214 $309 $0 $0 $41 $48 $55 $63 $21 $24 $41 $48 $14 $16 $138 $159 $315 $318 -----------.-----------.452 Total Operating Expenses Profit Before Interest and Taxes ($314) Taxes Incurred Net Income (loss) ($126) ($188) ($125) ($187) 41 .-----------.000 $1.-----------$298 $298 $298 $298 $298 $298 $298 $298 ($299) ($120) ($179) ($289) ($116) ($173) ($259) ($104) ($155) ($239) ($96) ($143) ($209) ($84) ($125) ($119) ($48) ($71) $881 $352 $529 $1.

064 $36.129 $450 $1.505 ($105) ($743) $657 $751 $96 $0 $0 $96 $0 $96 $100 $0 $0 $100 $0 $100 $111 $0 $0 $111 $0 $111 $119 $0 $0 $119 $0 $119 $130 $0 $0 $130 $0 $130 $164 $0 $0 $164 $0 $164 $542 $0 $0 $542 $0 $542 $617 $0 $0 $617 $0 $617 $2.913 $41.687 $13.062) $478 $304 $149 $706 $580 $509 $1.591) ($1.608 $1.848 $0 $0 $2.779 $11.520) ($1.579 Mar $1.205 $2.205 $2.859 ($413) $11.505 $1.251) ($1.3 Projected Balance Sheet (000s omitted) Assets Short-term Assets Cash Accounts Receivable Total Short-term Assets Long-term Assets Capital Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Accounts Payable Short-term Notes Other Short-term Liabilities Subtotal Short-term Liabilities Long-term Liabilities Total Liabilities Paid in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital $0 $0 $0 $0 $0 $0 $805 ($105) $0 $700 $700 $90 $0 $0 $90 $0 $90 $805 ($105) ($188) $512 $602 $91 $0 $0 $91 $0 $91 $805 ($105) ($375) $325 $416 $92 $0 $0 $92 $0 $92 $805 ($105) ($561) $139 $231 $94 $0 $0 $94 $0 $94 $1.687 $2.579 $0 $0 $0 $1.205 ($105) ($413) $1.698 $2.608 $0 $0 $0 $0 $0 $0 $0 $0 $0 $2.205 ($105) ($105) ($105) ($105) ($105) ($105) ($105) ($922) ($1.205 $2.304 $15.092 $0 $5.205 ($105) ($518) $10.038 $574 $404 $260 $824 $710 $673 $1.779 $525 $2.829 $33.516 $2.608 42 .205 $2.092 Starting Balances $700 $0 $700 $0 $0 $0 $700 Apr $600 $2 $602 $0 $0 $0 $602 May $413 $3 $416 $0 $0 $0 $416 Jun $228 $4 $231 $0 $0 $0 $231 Jul $745 $6 $751 $0 $0 $0 $751 Aug $566 $8 $574 $0 $0 $0 $574 Sep $393 $11 $404 $0 $0 $0 $404 Oct $238 $23 $260 $0 $0 $0 $260 Nov $794 $30 $824 $0 $0 $0 $824 Dec $669 $41 $710 $0 $0 $0 $710 Jan $598 $75 $673 $0 $0 $0 $673 Feb $1.913 $41.096) ($1.com .378 $23.452 $1.304 FY2000 FY2001 FY2002 $1.913 $41.579 $2.084 $7.AviaBid.394) ($1.304 $15.092 $0 $0 $5.505 $1.848 $5.304 $0 $0 $0 $2.304 $617 $0 $0 $617 $0 $617 $2.848 $0 $2.910 $525 $4.205 $2.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 7.505 $2.304 $15.

779 $3.829 $33.604 $0 $2.051 $22.378 $23.559 $0 $0 $0 $0 $3.231 $0 $0 $0 $2.696 $2 $0 $0 $0 $0 $2 ($100) $600 $1 $0 $0 $0 $0 $1 ($187) $413 $1 $0 $0 $0 $0 $1 ($185) $228 $2 $0 $0 $0 $0 $2 $518 $745 $2 $0 $0 $0 $0 $2 ($179) $566 $4 $0 $0 $0 $0 $4 ($173) $393 $11 $0 $0 $0 $0 $11 ($155) $238 $8 $0 $0 $0 $0 $8 $557 $794 $11 $0 $0 $0 $0 $11 ($125) $669 $34 $0 $0 $0 $0 $34 ($71) $598 $375 $0 $0 $0 $0 $375 $531 $1.452 $0 $90 $0 $0 $0 $1 $0 $0 $0 $1 $0 $0 $0 $2 $0 $0 $0 $2 $0 $0 $0 $4 $0 $0 $0 $11 $0 $0 $0 $8 $0 $0 $0 $11 $0 $0 $0 $34 $0 $0 $0 $378 $0 $0 $0 $76 $0 $0 $0 $617 $0 $0 $0 $1.079 $1.609 $25.910 43 .4 Projected Statement of Cash Flows (000s omitted) Apr Net Profit Plus: Depreciation Change in Accounts Payable Current Borrowing (repayment) Increase (decrease) Other Liabilities Long-term Borrowing (repayment) Capital Input Subtotal Less: Change in Accounts Receivable Change in Inventory Change in Other Short-term Assets Capital Expenditure Dividends Subtotal Net Cash Flow Cash Balance ($188) May ($187) Jun ($185) Jul ($182) Aug ($179) Sep ($173) Oct ($155) Nov ($143) Dec ($125) Jan ($71) Feb $529 Mar $649 FY2000 ($413) FY2001 FY2002 $11.779 $525 $0 $0 $0 $0 $525 $1.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 7.081 $11.559 $3.615 $10.AviaBid.com .615 $0 $0 $0 $0 $3.244 $0 $0 ($98) ($186) ($184) $700 $520 ($177) ($170) ($144) $700 $564 ($114) ($37) $906 $724 $13.400 $1.129 $75 $0 $0 $0 $0 $75 $649 $1.

The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 7.290 98.767 $70.000 $710 $57.092 $0 $36.66 1. to Liab.78% $8.006 $49.00 FY2001 0.74 1.350 $39.516 0.17 $36.74 1.608 $0 $5.767 $66.581 ($689) ($413) $2.26 Long-term plan Sales Cost of Sales Gross Margin Gross Margin % Operating Expenses Operating Income Net Income Short-term Assets Long-term Assets Short-term Liabilities Long-term Liabilities Equity FY2000 $3.35% $5.00 FY2002 0.78% $6.19% $3.78% 50.6 Projected Long Term Plan (000s omitted) Profitability Ratios: Gross Margin Net Profit Margin Return on Assets Return on Equity Activity Ratios AR Turnover Collection Days Inventory Turnover Accts Payable Turnover Total Asset Turnover Debt Ratios Debt to Net Worth Short-term Liab.892 92.000 $563 $45.73 $1.86 FY2002 98.59 $13.37 1.634 $0 $61.36 1.36 FY2000 0.65 18% 18% 4.516 FY2003 $58. Liquidity Ratios Current Ratio Quick Ratio Net Working Capital Interest Coverage Additional Ratios Assets to Sales Debt/Assets Current Debt/Total Assets Acid Test Asset Turnover Sales/Net Worth FY2001 92.14 1.73 27% 27% 2.48 62 0.53 FY2001 0.22% FY2002 4.11 FY2002 0.00 FY2001 5.913 $0 $2.74 1.98% 56.00 FY2000 3.463 $0 $6.78% $10.045 98.18% -17.35% 46.553 $0 $8.87 FY2003 98.00 3.48 46 0.51% FY2000 4.034 $18.304 $0 $617 $0 $1.36% 64.5 Projected Business Ratios (000s omitted) 7.087 $23.53 1.000 $955 $77.997 98.064 FY2002 $46.452 $41.48 41 0.17 8.90 12% 12% 6.378 $15.437 98.73 3.278 $39.59 5.00 FY2000 0.400 $403 $23.042 FY2004 $78.687 FY2001 $24.09% FY2001 4.963 $11.420 $0 $46.AviaBid.63% 71.11 1.22 1.848 $0 $13.00 FY2002 8.88 1.00 3.19% -13.570 $52.15 1.284 $29.00 3.com .95% -24.919 44 .064 0.137 $245 $2.687 0.50% 87.

7 Projected Break Even Analysis (000s omitted) 45 .AviaBid.The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace 7.com .

The Internet's On-Line Aviation Auction Community and Business-to-Business Marketplace Appendix A Marco Santiago JR President.AviaBid. CEO David McIntyre VP Marketing Kim Bozik VP Operations and Logistics TBD VP Sales and Business Development Diana Eckenburg Interim Chief Financial Officer TBD Director of Human Resources TBD Chief Information Officer TBD Chief Technology Officer TBD Director Content Management and Analysis 46 .com .